Flexible spending accounts (FSAs) give you the opportunity to pay for eligible health care and dependent care expenses on a before-tax basis. When you participate in an FSA, you direct part of your pay into one or both of the FSA accounts. ACS takes your contribution from your paycheck before federal income and Social Security taxes (and in most cases, state income taxes, if applicable) are withheld. This lowers the amount of your taxable pay, which in turn lowers the income taxes you pay.
ACS offers two types of flexible spending accounts. A Health Care Spending Account (HCSA) covers health care expenses that are not covered by your medical, dental, or vision plan, such as copays and deductibles. A Dependent Care Spending Account (DCSA) reimburses you for dependent care expenses, such as child care and elder care.
When you have an eligible expense, you can use the funds in your FSA to reimburse the expense by using your debit card (health care only) or filing a claim. You are not taxed on any payment from your FSA accounts. So, the money isn’t taxed when it goes into your FSA or when it comes out.
Your elections for the spending accounts do not carry over from year to year. You must enroll each year during annual enrollment if you want to participate.
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Questions about your employee benefits or other Human Resources issues? Contact the Workplace Solutions Center at (888) 471-2271.